These days, it's easy to forget that modern Alaska began in the midst of the Progressive Era, a massive reform movement characterized by intense anti-monopoly sentiment and a demand for government regulation and intervention in the nation's economic life. The Federal Reserve System was created in this period, and the Constitution amended to allow personal and corporate income taxes.
That anti-monopoly attitude had everything to do with how and why the Alaska Railroad was created. The railroad was a major federal contribution to non-Native settlement and economic development in the territory.
There are interesting questions about how different Alaska is from the rest of the American West, but the Alaska Railroad is a profound example of at least one difference. It was the only railroad in the country's history that the federal government built singly, and operated wholly as a federal enterprise. (The Panama Canal railroad was purchased by the U.S. in 1904 and sold in 1979.) The transcontinental roads, which opened the West after the Civil War, were built by private capital, subsidized by generous government land grants. But the Alaska road was a completely government contribution to Alaska from start to finish.
Several previous attempts to construct a railroad from Alaska's Gulf coast to the interior had failed. The enormous cost of railroad construction here was more than any normal group of investors could handle. But one not-so-normal group did have a go; that was the Guggenheim mining trust, the largest private business in America. Yet even they could not raise enough money for such an enormous project until they attracted the wealthiest financier in the U.S. at the time: J. Pierpont Morgan. Organized as the Alaska Syndicate, and engaged in other enterprises, the trust and Morgan built and ran the Copper River and Northwestern Railway, from Cordova to Kennecott, to tap the rich Wrangell Mountain copper deposits.
Originally the syndicate planned to build all the way to the Yukon River, where they projected a fleet of river steamers to service Interior mining properties. They began building the railroad in 1908 and finished it in 1911. Running up the Copper River, their line linked with the Richardson Highway at Chitina. The Richardson was essentially impassable through the Chugach Mountains north of Cordova most of the year. The Copper River line was thus the only viable transportation link between the Interior and Outside, giving the syndicate virtual control over Alaska's development.
It was the threat of that kind of monopoly control that motivated the U.S, Congress to authorize construction of an alternative, competing rail link. Alaska politicians, mindful of the need to pursue economic development, and caught up in the anti-monopoly movement of the time, fully supported a government-owned and-operated railroad to facilitate the opening of the "last frontier" by rugged, individualist pioneers. They saw no more contradiction in depending on the federal government to guarantee competition and nurture frontier settlement than today's Alaskans find in depending on the state-owned railroad, the state's Permanent Fund dividend program and federal spending to support modern life here.
Construction of the Alaska Railroad was essentially complete by 1917 but not tied together by the Tanana River bridge at Nenana until 1923. Along with significant conservation regulation, also a major aspect of the Progressive Era, the railroad put a crimp in the syndicate's ambitions. It abandoned plans to extend the Copper River line to the Yukon. After 1923, the Copper River line was not competitive with the ARR.
It's wryly ironic that the state's purchase of the Alaska Railroad was made possible only when taxes paid by private oil development sufficiently fattened the state treasury. It's a remarkable chapter in the public-private partnership that has made Alaska what it is.
Steven Haycox is a professor of history at University of Alaska Anchorage.